Needham & Company Downgrades Cadence Designs (CDNS) to Hold

October 24, 2013 9:49 AM EDT
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Price: $25.67 --0%

Rating Summary:
    7 Buy, 4 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 8 | Down: 10 | New: 7
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Needham & Company downgraded Cadence Designs (NASDAQ: CDNS) from Buy to Hold following solid Q3 results but a more cautious outlook.

Analyst Richard Valera comments, "In 3Q13 CDNS delivered results in line with consensus, making it CDNS' first "non-beat" Q since 3Q09. Also, despite maintaining prior 2013 guidance, CDNS clearly sounded a more cautious tone on the current environment, reflecting recent customer spending reductions, and we think trying to rein in estimates for 2014. With shares trading in line with nearest peer SNPS on a straight P/E at ~15x '14 estimates, but at a meaningful premium on a cash-adjusted basis (14.6x vs. 13.1x by our math), and with our belief that consensus estimates for '14 still need to come down, we see CDNS shares as fairly valued and as such are reducing our rating to Hold from Buy."

For an analyst ratings summary and ratings history on Cadence Designs click here. For more ratings news on Cadence Designs click here.

Shares of Cadence Designs closed at $14.51 yesterday.

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